Tepper

[PlanMaestro]

http://www.bloomberg.com/video/what-s-alpha-star-david-tepper-s-winning-strategy-XGkNGSi1RdCe3C3FSdhJmQ.html

 

http://www.bloomberg.com/video/david-tepper-is-bullish-on-the-markets-gbAbgiiiTyqf7RBdLJWh7w.html

 

http://www.bloomberg.com/video/tepper-biggest-mistake-was-russia-in-1998-I8eyDHNtT_y_kXJyaWfK4A.html

[frog03]

Quote from: txitxo on December 28, 2012, 03:05:39 AM

 

      Gio, nice to see you quoting Capablanca. He was truly an artist.

 

      I fully agree with Howard Marks, and he was vindicated by 2008-2009. But I am very reluctant to hold large amounts of cash. I've looked a lot into timing systems, and I think I've found a very good one but I am still skeptical about it because there has only been a couple of bear markets to test it. And I've done many backtests which prove that unless you time exceedingly well your entry and exit points, your performance will be inferior with respect to buy and hold.

   

    So putting together macro and micro, the optimum strategy should be to buy cheap stocks in cheap markets. You do your  favorite variant of value investing, either mechanical investing as I like, owner-managers which is your specialty, Grahamesque cigar-butts, or Buffett-like palaces with moats. But you buy those stocks in markets which are statistically cheap according to all the possible indicators you can muster. You only go to cash if all the markets in the world become expensive at the same time.

 

    Right now my model indicates that sometime before the end of next quarter, US, Canadian and Australian stocks are about to start a big decline. The UK market is pretty rich too. This is a statistical prediction, and I have no idea what will be the actual detonator of the decline. But if that does not happen, this time will be truly different.

 

    On the other hand, Euro-zone markets are very cheap and buying value stocks there should work very well in 2013. It is a pity that there are no real equivalents of LUK, BRK, MKL, FFH, etc. in the Eurozone. That would simplify the life of the part-time investor significantly...

 

**********

There are some in the Eurozone but not many and unlike the US examples, they are not insurance related.  I can think of two.

GBL in Belgium (partnership between the Belgian Frere family and the Canadian Desmarais family)

IDI in France (listed company that invests mostly in private equity.  66% owned by three main managers (OK 2, one passed away recently). 15% return to stockholders since 1991 despite currently trading at 2/3 of Book value.

There got to be others.  Anybody has other names?

[MrB]

http://www.bloomberg.com/video/what-s-alpha-star-david-tepper-s-winning-strategy-XGkNGSi1RdCe3C3FSdhJmQ.html

 

http://www.bloomberg.com/video/david-tepper-is-bullish-on-the-markets-gbAbgiiiTyqf7RBdLJWh7w.html

 

http://www.bloomberg.com/video/tepper-biggest-mistake-was-russia-in-1998-I8eyDHNtT_y_kXJyaWfK4A.html

 

I think this link strings the above together

http://www.bloomberg.com/video/appaloosa-s-david-tepper-on-stocks-strategy-hNEuFAUQSKORXP5UJNYUUQ.html

[txlaw]

Interesting.  Tepper talks about looking at any five year period of Appaloosa for judging performance.

 

Bruce B said the very same thing in his interview on Wealthtrack late last year about Fairholme.

 

I wonder if there is a precedent for that statement among the Buffett Partnership letters.  Does anyone know?

[txitxo]

 

There are some in the Eurozone but not many and unlike the US examples, they are not insurance related.  I can think of two.

GBL in Belgium (partnership between the Belgian Frere family and the Canadian Desmarais family)

IDI in France (listed company that invests mostly in private equity.  66% owned by three main managers (OK 2, one passed away recently). 15% return to stockholders since 1991 despite currently trading at 2/3 of Book value.

There got to be others.  Anybody has other names?

 

Thanks. I knew about GBL, but hadn't heard about IDI. I'll have a look, it sounds interesting.

[Yours Truly]

Quite a bit of discussion on macro here.. I think i've spent my time limit on macro talk based on this thread

 

"If you spend more than 13 minutes analyzing economic and market forecasts, you've wasted 10 minutes."

- P. Diddy Lynch

[Sportgamma]

http://static2.businessinsider.com/image/4f29655eeab8ead315000022-906-509/stephanie-ruhle-paul-volcker.jpg

[eclecticvalue]

It's great that he is bullish. Although I see many value guys holding cash since the market has been moving upwards. From Teppers comments it seems it won't take much money to move the markets going upward.

[Guest wellmont]

tepper is at the point in his career now where his media appearances will add alpha, ala DE and BA. Given the way he responded to one of the questions, I believe tepper feels this is the blow off phase. he will be selling to the cnbc/bloomberg "audience".

[motownsf]

tepper is at the point in his career now where his media appearances will add alpha, ala DE and BA. Given the way he responded to one of the questions, I believe tepper feels this is the blow off phase. he will be selling to the cnbc/bloomberg "audience".

 

Exactly...What what he does, not what he says.

[eclecticvalue]

When I think about it the lady didn't allow him to go more into detail about the downside risk. We shall see his 13-f soon.

[frog03]

Thanks. I knew about GBL, but hadn't heard about IDI. I'll have a look, it sounds interesting.

 

**********

Not technically part of the Eurozone but Kinnevik in Sweden has done 20% a year on average over 30 years and also trades at a nice discount.  This reminds me of North America where some of the best capital allocator companies such as BRK, FFH or LUK basically trade at close to book value when they have killed the indices.  Better capital allocator than average at cheaper than average multiples should certainly prove rewarding over time.

[berkshiremystery]

http://www.bloomberg.com/video/what-s-alpha-star-david-tepper-s-winning-strategy-XGkNGSi1RdCe3C3FSdhJmQ.html

 

http://www.bloomberg.com/video/david-tepper-is-bullish-on-the-markets-gbAbgiiiTyqf7RBdLJWh7w.html

 

http://www.bloomberg.com/video/tepper-biggest-mistake-was-russia-in-1998-I8eyDHNtT_y_kXJyaWfK4A.html

 

I think this link strings the above together

http://www.bloomberg.com/video/appaloosa-s-david-tepper-on-stocks-strategy-hNEuFAUQSKORXP5UJNYUUQ.html

 

Here's the accompanying article for the videos.

 

Appaloosa’s Tepper Bullish on Stocks as U.S. Growing 3%

2013-01-22 Bloomberg

http://www.bloomberg.com/news/2013-01-22/appaloosa-s-tepper-bullish-on-stocks-as-u-s-growing-3-.html

 

Tepper, 55, made his last big call on equities in 2009, when his fund returned 130 percent betting on bank stocks in the aftermath of the 2008 financial crisis. He owns Citigroup Inc. © today, saying the New York-based bank may rise 50 percent because of its strong international business. Citigroup declined 0.1 percent to $41.60 at 1:09 p.m. in New York.

U.S. stocks will get a boost as investors shift from credit investments, which are headed toward “extreme value” after climbing for the past few years, Tepper said.

 

 

Appaloosa Mgmt. LP portfolio profile as of 2012-09-30

http://holdings.nasdaq.com/asp/OwnerPortfolio.asp?FormType=OwnerPortfolio&CIK=0001006438&HolderName=APPALOOSA+MANAGEMENT+LP

[Guest wellmont]

tepper made a trade-able bullish call on cnbc last year I believe, that turned out to be right.

[jay21]

tepper made a trade-able bullish call on cnbc last year I believe, that turned out to be right.

 

He's still bullish

 

http://finance.yahoo.com/news/fund-manager-tepper-stocks-may-170317453.html;_ylt=AsUg3okkoegiZPyGarigGh.iuYdG;_ylu=X3oDMTQ4YjFqZGVxBG1pdANDTkJDIFRvcCBTdG9yaWVzBHBrZwNmYjA3MjEwYS1lY2QzLTMxOTItYTVhYS01NGE5ZjMwN2FkMjkEcG9zAzIEc2VjA01lZGlhQkxpc3RNaXhlZExQQ0FUZW1wBHZlcgM4MmNkZmQ5MS04YzAxLTExZTItYmZmZC04M2E5M2Y2Y2Y3ZTU-;_ylg=X3oDMTFpNzk0NjhtBGludGwDdXMEbGFuZwNlbi11cwRwc3RhaWQDBHBzdGNhdANob21lBHB0A3NlY3Rpb25z;_ylv=3

[fareastwarriors]

http://www.cnbc.com/id/101112707

 

 

Tepper: No taper for 'long time' to push up stocks

[bmichaud]

http://nymag.com/news/features/establishments/68513/

 

Great profile on Tepper. Key characteristics of his success IMO:

 

1. Distills complexity into several common sense bullet points

2. First mover into distressed situations

3. Takes concentrated positions

4. Zero use of leverage - buying at 20 or 30% of FV provides natural leverage!

5. Appears to wait for some type of floor to be in place before buying equities - govt backstop of banks in March 2009, QE2 in September 2010, LTRO in September 2011, QE3 December 2012, Japan whatever it takes proclamation late 2012 - whereas distressed debt has a natural MOS via post-BK recovery

6. Naturally optimistic

7. Appears to respect economic momentum and how a bad econ environment can mess up even the cheapest situation

 

 

Absolutely phenomenal stuff. This guy is a Buffett on steroids with a track record far outpacing WEB while managing sums WEB has historically deemed virtually impossible to generate such returns!!

[CorpRaider]

Thanks for sharing Ben.

[nikhil25]

Good read. Thanks for sharing.

[merkhet]

 

Absolutely phenomenal stuff. This guy is a Buffett on steroids with a track record far outpacing WEB while managing sums WEB has historically deemed virtually impossible to generate such returns!!

 

 

How is 30% net for 17 years far outpassing WEB's track record?

[stahleyp]

For whatever it's worth, the Tepper article is over 3 years old.

[bmichaud]

 

Absolutely phenomenal stuff. This guy is a Buffett on steroids with a track record far outpacing WEB while managing sums WEB has historically deemed virtually impossible to generate such returns!!

 

 

How is 30% net for 17 years far outpassing WEB's track record?

 

WEB was 31% gross versus 9% for the market for the life of his partnership (see attached). Tepper is 40% gross versus probably 5 to 10% for the market since inception.

1969.01.22.pdf

[merkhet]

 

WEB was 31% gross versus 9% for the market for the life of his partnership (see attached). Tepper is 40% gross versus probably 5 to 10% for the market since inception.

 

 

And yet, WEB's record was only 13 years long versus Tepper's 17 year long record (as of 2010). Alternatively, if I've compounded at a gross 50%+ for the last two years versus 20% for the market, does that make me as good as or better than Tepper?

 

See the point I'm trying to make?

[meiroy]

http://nymag.com/news/features/establishments/68513/

 

Great profile on Tepper. Key characteristics of his success IMO:

 

1. Distills complexity into several common sense bullet points

2. First mover into distressed situations

3. Takes concentrated positions

4. Zero use of leverage - buying at 20 or 30% of FV provides natural leverage!

5. Appears to wait for some type of floor to be in place before buying equities - govt backstop of banks in March 2009, QE2 in September 2010, LTRO in September 2011, QE3 December 2012, Japan whatever it takes proclamation late 2012 - whereas distressed debt has a natural MOS via post-BK recovery

6. Naturally optimistic

7. Appears to respect economic momentum and how a bad econ environment can mess up even the cheapest situation

 

 

Absolutely phenomenal stuff. This guy is a Buffett on steroids with a track record far outpacing WEB while managing sums WEB has historically deemed virtually impossible to generate such returns!!

 

“The point is, markets adapt, people adapt."

 

[bmichaud]

 

WEB was 31% gross versus 9% for the market for the life of his partnership (see attached). Tepper is 40% gross versus probably 5 to 10% for the market since inception.

 

 

And yet, WEB's record was only 13 years long versus Tepper's 17 year long record (as of 2010). Alternatively, if I've compounded at a gross 50%+ for the last two years versus 20% for the market, does that make me as good as or better than Tepper?

 

See the point I'm trying to make?

 

I feel like you just made my point but I must be missing something.

 

Tepper generated at least 30% alpha over 17 years versus 20% alpha for WEB over 13 years - how is that not better than WEB? And why would your 30% alpha over two years even be comparable to either of those track records? Yes if you do that for the next 15 years, you would be on par with Tepper....but again, I doubt you are managing billions (aren't you up to 3 or 4 million?).